JB Hi-Fi shares slump despite 21 per cent profit jump as investors react to outlook

JB Hi-Fi has brushed off the pre-Christmas arrival of Amazon in Australia to post a 21 per cent jump in profit for the first half of the financial year, but disappointed investors with a lower-than-expected outlook for the rest of the year.

Net profit grew to $151 million from an underlying result of $125 million in the same half last year, JB Hi-Fi said on Monday. That slightly beat consensus forecast for about $150 million.

But JB Hi-Fi's gross profit margins fell 20 basis points and its forecast for a full-year profit of between $235 million and $240 million - which would be up 15.5 per cent from last year - was as much as 3 per cent lower that the market was expecting.

JB Hi-Fi shares were sold-off savagely when the ASX opened, and the stock fell 7 per cent to $26.11 by 10.30am.

The consumer electronics powerhouse said it had total sales of $3.68 billion in the half-year to December 31, up from $2.6 billion in the same half in 2016 when sales grew 23 per cent.

The company acquired electronics and whitegoods retailer The Good Guys in September 2016, which has boosted its revenue.

Comparable sales at its flagship Australian JB Hi-Fi stores grew 7.8 per cent, driven by strong trading in phones, computers, audio equipment, drones, and gaming hardware.

Online sales grew 40 per cent to account for 4.8 per cent of total sales, JB Hi-Fi said.

JB Hi- Fi's chief executive Richard Murray said he was pleased with the record sales and earnings.

"It was another strong result for the JB HI-FI business in Australia, particularly through the important November and December periods," he said.

"We are pleased with the progress we have made at The Good Guys and are confident about thefuture opportunities for the Group.”

JB Hi-Fi’s same-store sales increased 4.5 per cent in January, a slowing from 7.2 per cent growth in the January 2017.

The Good Guys had equivalent same-store sales growth of 1.8 per cent in the December half.

The Good Guys’ sales fell 4.7 per cent in January, which JB Hi-Fi said was impacted by cycling strong sales of seasonal products like air conditioning units.

Earnings before interest, tax, depreciation and amortisation was $256 million - up from $205 million last year.

JB Hi-Fi announced an interim dividend of 86c, up 19 per cent from 2016.

More to come

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